Buy the Financial Sector ETF from thestreet.com
I just don't buy it. I have been listening to Mr. Jean-Claude Trichet, El Presidente of the European Central Bank (ECB) speak for a long time. I fully understand that the ECB has a single mandate, which is to fend off inflation.
The difference between the ECB and the Federal Reserve Bank here in the U.S. is that the Fed wears many hats. It is in charge of that same fight with the evil inflation, but it is also charged with supplying the proper stimulus to insure economic growth.
Generally, with growth comes employment. So, as we here in the U.S. have had the benefit of aggressive stimulus in the form of easier and easier monetary policy, the ECB has had to stand pat.
Because we were in an easing cycle, one of the collateral risks was heating up....inflation in the form of higher energy and food prices. We realized that the risks were weighed and that falling into a recession would be more harmful than falling into a $4 gallon of gasoline.. So, the Fed cut... and cut,... and cut again.
Another one of the sidebars to monetary easing is that the currency running the economy under easing pressure would find value elsewhere. That's where the rub was.
As we lowered rates and the rest of the developed (and not so developed) world held steady, traders turned to those foreign currencies for returns. Hence, the dollar slid and the Euro, Loonie, Aussie, Yen, Real and most other currencies gained..........
Rest Of Article
Friday, May 30, 2008
Buy the Financial Sector ETF
Wednesday, May 28, 2008
Airlines Are Not Safe at Any Price 5/28/08
I have been looking for a sell-off in oil for about $15 to $20 now. Five from the high is an interesting move, but to be accurate, I would call it amusing. That's because there are a few things that have to happen before the inevitable real correction in oil takes place.
I have seen these traps before. They are very similar. It starts with a move up on bullish news, and the early morning sees all bids. As the trading day progresses, sellers test the water. Yesterday, for the first time in a while, the bulls seemed to tire after three or four attempts to prop up the growing heaviness in oil. After all, the other news of the day wasn't bullish at all.
In fact, some of it was rather bearish. For the first time in six years (according to AAA), we American gasoline junkies curtailed our driving on the vehicular-ly beloved Memorial Day weekend. The number of miles driven in March retreated for the first time (year-over-year) in 28 years or so. The interesting thing is that the March numbers showed a not-so-innocuous 4.3% drop in miles driven to and from Costco(COST - Cramer's Take - Stockpickr) (one way to counter a ridiculously elevated price at the pump).
Back to yesterday, I was thinking of whether or not the airlines were in a position to bounce. After all, the group has been beaten senseless for its inability to manage one of the most basic business tenets going: manage your costs and the rest will follow. .......
Tuesday, May 27, 2008
Friday, May 23, 2008
Wednesday, May 21, 2008
Buy Brazil Through This ETF 5/21/08
Buy Brazil Through This ETF
from thestreet.com
Viva Brazilia!
I was listening to a great interview with Warren Buffett Tuesday morning where he was speaking to a group of media people from Switzerland. I love listening to this man. He is the greatest investor of our time. I would say of all time when you consider the fact that his accomplishments were made without the benefit of the industrial revolution -- an era when so much of the world's wealth was created.
I find his simplistic approach to everything very enlightening. He says that in order to be considered as a potential candidate for a spot in the Berkshire Hathaway(BRK.A - Cramer's Take - Stockpickr) family of businesses, a few things must be evident. The company has to be big enough to "move the Berkshire Hathaway needle." It must be run by management that Warren trusts will manage it the same way "the day after a deal as they would the day before a deal." And also it must be simple enough for Warren to understand.
I found this important on several levels. First, it tells me that when Warren Buffett steps down, I am out of Berkshire Hathaway until whomever takes over proves he or she has inherited the Buffett gift for recognizing the right deal. That's because I am sure you cannot teach that gut feeling.
Next, I realize that investing can be simple, not easy, but simple. We don't necessarily have to dig three or four levels into the books to make money. There are those that do quite well micro-dissecting the balance sheet and they are rewarded for their work. Then there are the rest of us .......
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Tuesday, May 20, 2008
Monday, May 19, 2008
Jazzed About Jacobs and Fluor 5/19/08
Jazzed About Jacobs and Fluor
Nawlins Baby! While Miami is my home away from home and New York is my home -- New Orleans is a great place to spend some time and is one of my favorite cities to get away to for a weekend. The city is chock full of life, passion and swagger.
The place is littered with phenomenal restaurants, beautiful architecture and up-and-coming artists. The French Quarter is a quaintly beautiful square filled with bistros and culinary delights. New Orleaners seem to sport a really unique mix of Cajun spice and French 'tude -- all buried within an 'I'm loving life' exterior. I could go on and on -- just know that New Orleans is high on my list of recommended places to visit.
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Friday, May 16, 2008
ROLL THE DICE ON MELCO AND WYNN
Roll the Dice on Melco and Wynn from thestreet.com 5/16/08
Editor's Note: Eric Bolling is new to TheStreet.com. A top Wall Street trader and an on-air television personality for the Fox Business Network, Bolling specializes in commodities, technology, resource trades and ETFs. He will provide regular picks in his column.
So I am on the set of the morning show "Money for Breakfast" on FOX Business and one of the guests was talking on his cell phone. He was saying that they were "recession-proof"....and that "people will still..... " do something or another -- his voice trailing off as he turned to go onto the set for a hit. It immediately brought to mind one of the oldest trading adages around: "You gotta love this stock because it is recession proof."
About 10 years ago, my mentor called me into his office to talk about some trades I was making. I have always been an extremely active commodities and equities trader, but at the time I was expanding into a wide range of sectors. Since he owned the clearinghouse where I cleared my trades, he saw all my activity. He is the Godfather to my son, so I have no problem with him seeing my trading activity.
This day, he brought me into his office and asked me why I was buying casino stocks. I said that these are 'recession proof' stocks. He looked me in the eye and I thought he was ready to say, "what the %@*!" Instead, he held the bewildered look for a beat or two and walked away. It didn't take anything more than that look to make my brain start to go into overdrive.
"Will people gamble as much even if their wallets are getting thinner or their job is in question? No you idiot, that's crazy."
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Wednesday, May 14, 2008
Bolling's Triple Play: Hot Rolled Steel 5/14/08
Bolling's Triple Play: Hot Rolled Steel 5/14/08
Editor's Note: Eric Bolling is new to TheStreet.com. A top Wall Street trader and an on-air television personality for the Fox Business Network, Bolling specializes in commodities, technology, resource trades and ETFs. He will provide regular picks in his column.
There have been only 14 or so unassisted triple plays in modern Major League Baseball history ( 107 years or so of it ). However, I would credit the perfect game (15 times in history of the Majors) and hitting four dingers in a single game (15 times) as monumentally more heroic, even if they are slightly more frequent.
That being said, it is still an interesting sequence of fates that have to be present in order to score an unassisted triple play. There has to be no outs in the inning and at least two men on base. Then, the batter must hit a line drive to a fielder covering a base because a runner is stealing, putting the fielder in the right place at the right time to make all three put-outs.
Two weeks ago I ran a 'Bolling For Dollars' segment on Fox Business called 'Ironman Investing.' I talked about the strong prices for "hot rolled steel, baby." I outlined why I felt U.S. Steel(X - Cramer's Take - Stockpickr), Mittal(MT - Cramer's Take - Stockpickr) and Vale(RIO - Cramer's Take - Stockpickr) were positioned for a run. Little did I know that we were on the verge on an unassisted triple play. But here's how it's playing out.
Line drive: 1 out. There is no doubt about the awesome growth picture in the emerging economies around the world. Hot rolled steel prices have continued their torrid ascent as the world is demanding more and more steel for infrastructure, buildings and massive increases in automobile ownership in the new Chinese economy.
Put out: 2 out. The oil industry is one of the biggest customers of the steel industry. Why? It buys tubular steel for a wide range of uses. The most obvious is the drilling deeper and deeper into the ground, sea or wherever they think they might find the stuff that goes for $125.85 per 42-gallon drum. Pipeline companies pipe the slick stuff from location to location and need steel for that. And finally, the refiners need steel for those much publicized antiquated refineries. The bottom line is that a customer with a fat wallet is good.
Put out: triple play complete. If all the news so far wasn't good enough, this finishes it. U.S. Steel recently decided to raise prices and analysts upgraded them. Wow, I guess the demand for the product is so strong they can not only add input cost surcharges, but they get The Street to applaud the move. I will bet the higher price sticks for a while even if the steel market gets soft (but, there seems to be nothing like that on the horizon).
The triple stock play was and is U.S. Steel, based on its pricing power, Street sweetheart status and customer base. I also highlighted Mittal because of its strong presence in the emerging Indian and Chinese economies. It is also going to benefit from the U.S. Steel price change. And finally, I have always loved RIO. If you don't have iron ore, you can't make steel, and RIO is the world leader in iron ore mining. It accounts for 17% to 20% of the world production of iron ore (depending on who you talk to). This stock has been a Bolling fave for years and until things change in the commodity market, I will continue to like RIO.
As it turns out, all three of these steel plays settled at the all-time highs yesterday. Remember..... "it's only their all-time high...for now!"
Hot rolled steel is an unassisted triple play in my book.
At time of publication, Bolling was long RIO and X, although holdings can change at any time.
Eric Bolling is a host on the new Fox Business Network. Bolling was one of the developers and original panelists (nicknamed "The Admiral") on CNBC's "Fast Money."
Bolling is an active trader specializing in commodities, resource trades and ETFs.
Bolling is a member of several exchanges including The New York Mercantile Exchange (NMX), The Intercontinental Exchange (ICE) and The Commodity Exchange of New York.
After spending 5 years on the Board of Directors at the NYMEX, he became a strategic adviser to that Board of Directors where he assisted in bringing the company (NMX) public. He has been included in Trader Monthly Top 100 in 2005 and 2006. Bolling was the recipient of the Maybach Man of the Year Award in 2007 for his contribution of philanthropy and willingness to de-mystify investing to Main Street.
Bolling graduated from Rollins College in Winter Park, Florida and was awarded a fellowship to Duke University. Bolling was an accomplished baseball player. He was drafted by the Pittsburgh Pirates where he played before his career was cut short due to injuries. He honors his baseball past by sporting the NYMEX trader badge, R.B.I.
Tuesday, May 13, 2008
Monday, May 12, 2008
Ride Defensive ETF Trades Until the Tide Turns
Ride Defensive ETF Trades Until the Tide Turns from thestreet.com
I could not be more content. I am sitting on my deck overlooking the ocean with a 24 ounce coffee, Barron's and my dog by my side. I am watching some awesome waves --three to four feet -- perfectly breaking into the very high tide. The tide is as high as it has been since I built this place last year (yep, I did indeed top-tick the real estate market!) That's ok with me though, given the fact that I am able to write this column on my laptop, with this view.
Watching the power of the ocean, I can't help but think of the amazing flow of money into the commodity trade over the last 12 to 18 months. Like the tide, money flows in and out of sectors. I have to admit that even with the commodity bullish perspective I maintain, I am surprised at the massive investment flow.
It should come as no surprise that the sectors' whose tides have retreated, notably housing (HovnanianHOV, BeazerBZH and PultePHM and financials (Bear StearnsBSC, CitigroupC, CountrywideCFC and AmbacABK, etc.). I have suffered the inverse fate of the oil trade, see the U.S. Oil Fund ETFUSO, the gold trade [see streetTracks Gold ETF (GLD)] and the grain trade, see PotashPOT, BungeBG, DeereDE, MonsantoMON, or the Market Vectors Global Agribusiness ETFMOO.
The commodity tide is still rising and will continue to do so until another pull signals that high tide has been passed and the water may retreat.
The only thing strong enough to change the tide would be a firming in the U.S. housing market. That would come in the form of a firming of home prices. We would need a few months of strength in prices coupled with a sustained drop in inventory of homes -- new and not so new. If this happened, it would signal that the worst is over for the homebuilders. But, very much more importantly, it would take the pressure off the banks holding assets tied to those home values. Only then will they see some light at the end of this long, dark tunnel.
You may even be able to hear a collective sigh of relief by some investment bank CEOs who are torn between telling the Street exactly how much exposure they still have and hoping beyond hope that the market for their collateralized debt obligations (CDOs), credit default swaps (CDSs) and mortgage backed securities (MBSs) finds a bid before that day of reckoning.
The day will come when it is safe to dive back into the financials. The signal will be a clear one. Headlines will read something like this: 'Home Prices on the Rise'. Now, the tide for buying is rising. The cool thing is that there will be opportunities everywhere. Billions of investable dollars are sitting on the sidelines waiting for that same bell to ring. We will be able to buy highs and sell higher. It's a trend-traders utopia. The thing is, I think this 'safe to get back into the water' bell is approaching. However, I am not ready to jump in with both feet yet.
Until the horn sounds, I think a portion of your portfolio should remain defensive. I have talked about defensive ETFs in the past. My two favorites have been, and remain, the Consumer Staples Select Sector SPDR ETF(XLP - Cramer's Take - Stockpickr), and the PowerShares International Dividend Achievers ETF(PID - Cramer's Take - Stockpickr).
XLP is a solid play because people will continue to buy the basic necessities, such as toothpaste, toilet paper, and deodorant, even if their home values slide and they feel the nasty sting at the pump. With this play you get exposure to Procter & Gamble(PG - Cramer's Take - Stockpickr), Wal-Mart(WMT - Cramer's Take - Stockpickr), Altria Group(MO - Cramer's Take - Stockpickr) and Coca Cola(KO - Cramer's Take - Stockpickr).
The other ETF is PID, which gives you exposure to stocks that pay high dividends...internationally! For example, Barclays PLC ADR(BCS - Cramer's Take - Stockpickr), Bank of Montreal(BMO - Cramer's Take - Stockpickr) and HSBC Holdings ADS(HBC - Cramer's Take - Stockpickr) are all in this ETF. PID has performed well because, by default, it benefits from the substantial slide in the U.S. Dollar. The dollars loss is the Euro's, Yen's, Real's, Yuan's gain, so an investment in PID is fortified by being "in" these currencies.
Until the lifeguard tells us that Trader Beach is open, it is not a bad idea to diversify into a bit of defensive ETF's, which may provide a place to bank your investment bucks. Don't worry, missing the beginning of a tidal change is ok. The tide is strong enough to carry your portfolio even if you miss the first few percentage points. By waiting, you can avoid some early swimmers who get caught in nasty riptides. (Sorry for all the campy aquatic references...can't help myself given the view.)
At time of publication, Bolling was long C, PG, KO and gold, and short oil, although holdings can change at any time.
Eric Bolling is a host on the new Fox Business Network. Bolling was one of the developers and original panelists (nicknamed "The Admiral") on CNBC's "Fast Money."
Bolling is an active trader specializing in commodities, resource trades and ETFs.
Bolling is a member of several exchanges including The New York Mercantile Exchange (NMX), The Intercontinental Exchange (ICE) and The Commodity Exchange of New York.
After spending 5 years on the Board of Directors at the NYMEX, he became a strategic adviser to that Board of Directors where he assisted in bringing the company (NMX) public. He has been included in Trader Monthly Top 100 in 2005 and 2006. Bolling was the recipient of the Maybach Man of the Year Award in 2007 for his contribution of philanthropy and willingness to de-mystify investing to Main Street.
Bolling graduated from Rollins College in Winter Park, Florida and was awarded a fellowship to Duke University. Bolling was an accomplished baseball player. He was drafted by the Pittsburgh Pirates where he played before his career was cut short due to injuries. He honors his baseball past by sporting the NYMEX trader badge, R.B.I.
Friday, May 9, 2008
Basket of Trades to Close Out Week 5/9/08
Eric's Third Article from thestreet.com
Basket of Trades to Close Out Week
Editor's Note: Eric Bolling is new to TheStreet.com. A top Wall Street trader and an on-air television personality for the Fox Business Network, Bolling specializes in commodities, technology, resource trades and ETFs. He will provide regular picks in a column for TheStreet.com.
The week's almost over, but before you start kicking back, there's plenty of hot trades out there to close out a busy week.
On Monday, there was a lot to talk about the Berkshire Hathaway(BRK.A - Cramer's Take - Stockpickr) investor meeting that was finishing up in Omaha. Warren Buffett and Bill Gates (Berkshire Hathaway board member) were available and spent some time with a FOX Business colleague of mine.
The most interesting takeaway (for me) from the interview conducted by my good friend Liz Claman was Gates' reaction to Microsoft's(MSFT - Cramer's Take - Stockpickr) decision to walk from the Yahoo!(YHOO - Cramer's Take - Stockpickr) offer. I think we realized that Steve Ballmer is in complete control of the Microsoft steering wheel. Gates seemed more interested in telling us what a great investor, philanthropist, guy Warren is. (Uh.. Bill, we knew that.)
We were then given a chance to see Susan Decker (Yahoo president- and, very interestingly, also a board member of Berkshire Hathaway) tell us, matter-of-factly, that the deal just didn't happen. "There was a bid, and there was an ask." Hmmm.... Yahoo! closed at $28.67 the prior Friday and opened in New York at $23.03, down 19.5% (Think she wished CEO Jerry Yang moved his ask price?).
Tuesday I spent the morning trying to make logic out of a $122 crude oil price. It defies logic, but years of reading Dennis Gartman's newsletter columns taught me that markets can stay illogical longer than stubborn traders can remain solvent... or something like that. Dennis is so eloquent he would say it in precisely the correct way. I am still watching crude defy gravity as I write and it just traded at $124.61, another new high.
This comes on the heels of a massive (and unexpected) inventory build this week. Gasoline demand dipped for the first time since most of us have been trading, and first-quarter productivity, although pleasantly positive, has paved the way for the Fed to stop easing soon (As in June).
So if I can't tag gasoline demand, crude oil supply, or the potential for a weaker dollar due to Fed rate cuts.....Dennis?
Wednesday was a challenging trading day. As mentioned above, the productivity figures for the first quarter were expected to show that non-farm business productivity rose 1.3% to 1.5%. We were given a bit of good news in that the number was much better than analysts (ha!) expectations. Productivity increase for the quarter was 2.2%.
The markets reacted as expected. The S&P went from a pre-open flat to a gain. But that's where the fun ended. The Dow, S&P and Nasdaq all steadily declined throughout the session. The markets closed at the lows of the session and my on-air optimism was replaced with my tail wedged firmly between my legs.
I follow the charts religiously and 1400 in the June S& P is very important. It has been building as a value area. I would like to see a close above 1410 soon. And a close above 1427 would green-light some serious buying -- both mine and The Street.
As it stands, the S&P is in a precarious spot. There is a trend line that extends from the March 17 low and the April 15 low and onward. That line is support now. It comes in at 1382 this week. I definitely want to see 1382 hold Friday. Or we may retrace back down to the first level of support at 1350.
On Thursday, I was encouraged to see the Dow manage a plus (+52.5) after the near 200-point sell-off Wednesday. However, the S& P chart points are very relevant in determining my add, sell, or hold mindset going forward. I have to admit, the shocking oil price is weighing on my decisions as well.
However, today I am ready to add to some financials like Citigroup(C - Cramer's Take - Stockpickr) and Goldman Sachs(GS - Cramer's Take - Stockpickr) and energy like Chevron(CVX - Cramer's Take - Stockpickr) and Exxon Mobil(XOM - Cramer's Take - Stockpickr). I will most likely look to buy Monsanto(MON - Cramer's Take - Stockpickr), Deere(DE - Cramer's Take - Stockpickr) and possibly a steel stock like U.S. Steel(X - Cramer's Take - Stockpickr) if the resistance (1427) is taken out.
I will hold everything between 1427 and 1382, and I will sell some of my non-core holdings in Cisco(CSCO - Cramer's Take - Stockpickr) and AT&T(T - Cramer's Take - Stockpickr) below 1382 on a settlement basis.
Have a profitable trading day and a great weekend.
At time of publication, Bolling was short oil, long C, GS, MSFT, CVX and XOM, although holdings can change at any time.
Eric Bolling is a host on the new Fox Business Network. Bolling was one of the developers and original panelists (nicknamed "The Admiral") on CNBC's "Fast Money."
Bolling is an active trader specializing in commodities, resource trades and ETFs.
Bolling is a member of several exchanges including The New York Mercantile Exchange (NMX), The Intercontinental Exchange (ICE) and The Commodity Exchange of New York.
After spending 5 years on the Board of Directors at the NYMEX, he became a strategic adviser to that Board of Directors where he assisted in bringing the company (NMX) public. He has been included in Trader Monthly Top 100 in 2005 and 2006. Bolling was the recipient of the Maybach Man of the Year Award in 2007 for his contribution of philanthropy and willingness to de-mystify investing to Main Street.
Bolling graduated from Rollins College in Winter Park, Florida and was awarded a fellowship to Duke University. Bolling was an accomplished baseball player. He was drafted by the Pittsburgh Pirates where he played before his career was cut short due to injuries. He honors his baseball past by sporting the NYMEX trader badge, R.B.I.
